California cost of living: No more cheap rent
For Californians already living on the margins, recent numbers show that affordable housing and health care are both likely becoming even more difficult to come by.
As CalMatters’ housing reporter Ben Christopher explains, inland cities such as Bakersfield, and Fresno — often less expensive places to live than coastal cities — are experiencing dramatic rent hikes that are squeezing out lower-income residents and disrupting local housing markets.
Since the beginning of the pandemic, rents for these cities have increased by as much as 40% as remote work exploded and white-collar workers sought cheaper housing.
The result? The housing affordability crisis that continues to plague the coast is now stretching outward — and residents in the Central Valley are losing their lower cost of living.
- Jeff Tucker, economist at the real-estate listings company Zillow: “People have been moving towards that more affordable option when they don’t have anywhere else in California that they can afford.”
In response to this housing crunch, Bakersfield and Fresno have permitted about 15% more housing units in 2021 and 2022 than they did in the two years before the pandemic. But recent efforts to expand tenant rights and rent control, Ben reports, have been largely unsuccessful.
It’s not just low-cost housing: Fewer Californians have affordable health care coverage, writes CalMatters’ health reporter Ana B. Ibarra.
Every year, Medi-Cal reviews enrollees’ eligibility. But when COVID-19 hit, the state paused the process. With the peak of the pandemic considered over, the state restarted its renewal process in the spring and began kicking off people who either did not turn in their renewal packet in time, or whose income could not be verified.
Since then, of the 1 million-plus Californians who were expected to renew coverage in June, about 225,0000 of them, or 21%, have lost their Medi-Cal coverage as of July 1.
There are various reasons for this: Former enrollees may not have received their renewal packets yet, received a packet in a language not native to their own or their paperwork may have experienced a processing delay at a county office.
Because enrollees who have been dropped have 90 days to reinstate coverage, state officials anticipate the non-renewal rate to be closer to 17%. Still, more residents are expected to lose coverage as California continues to review the eligibility for almost 16 million people over the next 12 months.
- David Kane, Western Center on Law and Poverty senior attorney: “I don’t think today’s preliminary numbers mean we can all sit back and think things are OK. These disenrollments are not inevitable. The state, counties, advocates, and community groups together have the power to help more people keep their Medi-Cal.”
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1 But wait, good news on health care
From CalMatters’ health policy reporter Kristen Hwang:
More than half a million Californians who get their health insurance through Covered California will no longer have to pay deductibles next year.
The Covered California board voted Thursday to use $82.5 million to significantly reduce out-of-pocket costs for members enrolled in the mid-tier Silver Plans, ending a drawn-out budget battle between Gov. Gavin Newsom, state legislators and health care consumer advocates.
For years, advocates have criticized the Newsom administration for moving money intended for health care subsidies into the state’s general fund. This year, facing a projected $31.5 billion deficit, legislators rejected what they called a plan to save money “on the backs of our low-income communities.” In the final budget agreement, lawmakers allocated $82.5 million to lowering health insurance costs over the next year and $165 million annually. The state will also repay a $600 million loan taken from the subsidy reserve fund.
- Diana Douglas, policy and legislative director for Health Access California: “This is huge — hundreds of thousands of Californians will be able to better access and afford hospital stays, doctor visits, prescription drugs, and more.”
Covered California is the state’s Affordable Care Act insurance marketplace for middle-income residents. Under the plan, deductibles will be eliminated for individuals earning as much as $33,975 annually and families earning up to $69,375 annually. Previously, deductibles would have topped $5,400. The plan also significantly reduces out-of-pocket copays for doctor visits and prescription drugs. Approximately 650,000 current enrollees could benefit, according to Health Access California.
About 35,000 people who are enrolled in a lower tier plan will be automatically moved up to a Silver Plan if the change would save them money.
Covered California Executive Director Jessica Altman said next year enrollees will have the “highest level of affordability support” ever offered.
- Altman, in a statement: “Recognizing that cost is still the key barrier to proper health care for too many Californians, our goal is to improve affordability for our enrollees in every aspect of their health care.”
Renewal for Covered California enrollees begins in October.
2 Wage theft staff blame slow hiring
Dozens of state employees responsible for enforcing laws against wage theft say that low pay, red tape and a “crippling inability to process and fill vacancies” are the cause of a record backlog of unpaid wage claims.
California workers have long faced wait times beyond the 120 days state law requires to have their unpaid wage claims heard, but the delays that worsened during the pandemic have reached staggering levels. More than 38,000 workers filed wage claims in 2022, the highest in recent history, and wait times for a hearing climbed to 800 days. Nearly a third of the Labor Commissioner’s office’s positions are vacant.
The office’s employees say they’re paid 30% less than similar public-sector jobs and can’t retain experienced colleagues. Nearly 80 staff — including attorneys, hearing officers and legal secretaries — signed a July 9 letter detailing those grievances to the Joint Legislative Audit Committee. It’s the first time rank-and-file agency staff have spoken publicly about the wage theft wait times.
Lawmakers this year already approved an audit to examine backlogs in the Labor Commissioner’s office. That review is scheduled to begin in September, after objections from unions and other labor groups almost scuttled it. The staff letter, which KQED first reported, asks lawmakers to focus the audit specifically on improving hiring practices, which mirrors one of the labor groups’ proposals, and suggests raising pay to retain employees.
The Department of Industrial Relations, which houses the Labor Commissioner’s office, lost the ability to directly hire staff in April 2019 after a state auditor’s report alleged the department’s former director Christine Baker unfairly hired and promoted her daughter. Vacancies had to be filled by the California Department of Human Resources. The department regained hiring power in 2021, officials told lawmakers during a hearing last year.
But in their letter, the Labor Commissioner’s office staff said that hiring remains “unreasonably slow,” leading qualified candidates to take other jobs before getting an interview. Staff wrote that the oversight from both the Department and CalHR “have caused substantial waste of staff time, duplication of work, and delays in filling positions for months or years.”
3 Legal aid for farmworkers
Many farmworkers in California toil under unsafe working conditions, sometimes inhaling wildfire smoke or being exposed to harmful pesticides. But with scarce safety nets available for them, these workers typically avoid reporting their employer for violating safety rules or for alleged wage theft — especially since about half of them are undocumented.
But a new pilot program, unveiled by the governor on Wednesday, is hoping to change that. As Nicole Foy of CalMatter’s California Divide team explains, the California Labor & Workforce Development Agency is partnering with the California Department of Social Services to provide free legal assistance to farmworkers involved in state labor investigations, regardless of their immigration status.
The $4.5 million program will connect farmworkers with organizations that already provide immigration legal services, such as case reviews, legal advice and attorneys.
- Soria: “I think that in the absence of comprehensive immigration reform, California acknowledges that we have a broken system…. Farmworkers are really the backbone of one of the largest agricultural economies in the country.”
The pilot program will be funded from money already allocated annually for immigration services at the California Department of Social Services. The program is expected to kick off later this year, though state officials did not specify exactly when.
CalMatters columnist Dan Walters is away and will return Monday.
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